An important question is when and how to fully reopen the economy. Carlos Garriga and Guillaume Vandenbroucke bring an economist’s viewpoint to the study of this question. The fact that people do not necessarily consider how they might spread COVID-19 infection to others is an “externality” that introduces a role for government to regulate or coordinate actions. They lay out the balance between benefits and risks of reopening.

Section 342 of the Dodd-Frank Act requires the St. Louis Fed to submit to Congress an annual report on its previous year's OMWI efforts. The St. Louis Fed's report, released March 31, 2021, is the 10th such report since the creation of its OMWI in January 2011. The report details the St. Louis Fed's 2020 OMWI activities related to employment, procurement and financial literacy. Read the 2020 report (PDF).

Past reports:

By Alexander Monge-Naranjo, Research Officer and Economist

The unemployment rate—the fraction of workers who are both out of work and actively seeking employment—is followed closely by policymakers and observers of the economy’s overall performance.

The unemployment rate is not the converse of the employment rate—the fraction of the population (not just workers) who are employed—since many nonemployed individuals are out of the labor force because they have health issues or are studying, or simply because they are retired or dedicated to activities outside the labor market. So, the unemployment rate closely measures the fraction of available workers who are not being utilized and, as such, provides a crucial indicator for the overall economic activity.

In a previous post, we examined the substantial disparities in the unemployment rates of different groups of workers before and during the COVID-19 crisis. The crisis ravaged almost all sectors of the labor...

“All this data that we've seen in these groups that have been disproportionately hit, it's really just been COVID highlighting and exacerbating existing inequities,” says Ana Hernández Kent, senior researcher at the St. Louis Fed’s Institute for Economic Equity. She joins Meredith Covington, manager of Supervisory Policy and Risk Analysis, also of the St. Louis Fed. They talk with Christine Smith, communications specialist, about how the “she-cession” is disproportionately affecting women of color and sparking conversations about child care.

Contacts reported that economic conditions have moderately improved since our previous report. Some large employers planned for a robust hiring season, including hosting spring job fairs. Area universities also indicated a robust hiring season. Inflation pressures have increased moderately, but the degree of change has varied across industries. Many contacts cited a faster-than-expected pace of vaccinations, stronger-than-expected economic activity, and an improving outlook. Consumer spending reports indicate a high degree of sales volatility stemming from federal aid to households and low retail inventories. Contacts across many sectors continued to cite ongoing supply chain difficulties, such as sourcing imported inputs; however, some contacts reported improvements in domestic supply chains.

Employment and Wages

Employment has increased moderately since our previous report, especially in the transportation, manufacturing, and hospitality sectors. Two...

By Crystal Flynn, Digital Web Strategist

At the onset of the COVID-19 crisis, the federal government moved quickly to enact four major pieces of legislation to help offset potential economic, health and societal impacts of the global pandemic. As of Oct. 1, 2020, roughly $2.59 trillion in new budgetary resources had been made available for federal agencies.

An analysis from the U.S. Department of the Treasury’s Data Lab in collaboration with the St. Louis Fed, explores how supplemental funding for COVID-19 makes its way from Congress to the American public and the economy. (At the time of publication, this data analysis reflected fiscal year 2020, or Oct. 1, 2019 to Sept. 30, 2020.)

The passage and signing of the four acts marked the funding phases.

In a year of unknowns, one thing is certain: Historians will be studying 2020 for generations to come. The wide-ranging effects of COVID-19 will ripple through the coming decades, shaping our lives in new and unforeseen ways well into the future.

While no one has been more affected by the pandemic than those who’ve experienced its direct effects—from becoming sick, to dealing with the loss of a loved one or heroically working on the front lines—as a society, we will forever be changed.

And, as we’ve seen, these fundamental changes are having short- and long-term economic impacts—which have been analyzed and documented by economists at the Federal Reserve Bank of St. Louis.

For more than a half-century, the St. Louis Fed has staked a claim as an economic research engine that, today, ranks among the top research institutions worldwide. Knowing the importance of this expertise as COVID-19 gripped the world last spring, we shifted into high gear, and the...

By Alexander Monge-Naranjo, Research Officer and Economist

The unemployment rate—the fraction of workers who are both out of work and actively seeking employment—is followed closely by policymakers and observers of the economy’s overall performance.

The unemployment rate is not the converse of the employment rate—the fraction of the population (not just workers) who are employed—since many nonemployed individuals are out of the labor force because they have health issues or are studying, or simply because they are retired or dedicated to activities outside the labor market. So, the unemployment rate closely measures the fraction of available workers who are not being utilized and, as such, provides a crucial indicator for the overall economic activity.

In a previous post, we examined the substantial disparities in the unemployment rates of different groups of workers before and during the COVID-19 crisis. The crisis ravaged almost all sectors of the labor...

By Crystal Flynn, Digital Web Strategist

At the onset of the COVID-19 crisis, the federal government moved quickly to enact four major pieces of legislation to help offset potential economic, health and societal impacts of the global pandemic. As of Oct. 1, 2020, roughly $2.59 trillion in new budgetary resources had been made available for federal agencies.

An analysis from the U.S. Department of the Treasury’s Data Lab in collaboration with the St. Louis Fed, explores how supplemental funding for COVID-19 makes its way from Congress to the American public and the economy. (At the time of publication, this data analysis reflected fiscal year 2020, or Oct. 1, 2019 to Sept. 30, 2020.)

The passage and signing of the four acts marked the funding phases.

Reports from contacts indicate that economic conditions have been generally unchanged since our previous report. Firms continue to report mixed changes in employment levels. Firms reported difficulties attracting candidates for positions despite increasing wages. Inflation pressures have increased, as contacts reported moderate increases in prices; however, most contacts believe it will be difficult to pass on further price increases. Overall, contacts' outlooks continued to improve and are generally optimistic. Most cited a high degree of uncertainty about the pace of recovery, which related primarily to the pace and efficacy of vaccinations. 

Employment and Wages 

Employment trends have been mixed since the previous report. On net, 12% of respondents reported employment levels lower than a year ago. Contacts noted stagnant or declining employment, especially among small businesses and leisure and hospitality firms, with...

The consumer price index (CPI) measures the cost of a fixed bundle of consumer goods relative to the cost of those same goods in a chosen reference year. Inflation is the percent change in the index from one year to the next and reflects how prices are changing for consumers.

The producer price index (PPI) is a similar construct that measures the price that producers get for their wares. It was formerly called the wholesale price index (WPI). Because many of these goods are intermediate goods and thus inputs to the production of final consumer goods, one might hypothesize that changes in the PPI could forecast future changes in the CPI.

The FRED graph above shows recent movements in these two series (January 2015 to present). Both series have grown at a fairly constant rate over the medium term. Moreover, after an initial dip at the start of the COVID recession, the PPI has risen sharply. Does this mean that future CPI inflation is imminent?

While...

At the St. Louis Fed, we are driven by our mission to promote a healthy economy and financial stability. In 2020, we carried out our mission while actively monitoring the developments of the spread of COVID-19 and its profound impact on our nation, the Federal Reserve’s Eighth District and our workforce.

The Bank’s 1,436 staff members—from our District’s head office in St. Louis to branches in Louisville, Little Rock and Memphis—serve the public’s interest in many ways, as seen in the following numerical snapshot of 2020. However, this snapshot will look different from past years’: On March 16, 2020, the Bank moved to operating on a full-time remote basis except for staff engaged in essential on-site operations. As a result, event attendance and figures tied to meeting in person were lower than in past years, though Bank activities were robust, and certain participation categories exceeded those of previous years.

Housing distress was concentrated among low- and moderate-income (LMI) households of all races and ethnicities. However, disparities existed across the LMI racial and ethnic groups, (See the figure below.)

Statistical analyses of the Socio-Economic Impacts of COVID-19 Survey data show that LMI Black households were 1.4 times more likely than LMI white households to be delinquent on both housing payments (12.9% versus 9.2%) and utility bill payments (18.5% versus 13%) in the early months of the pandemic (from about late January to mid-May 2020). The relationship was somewhat different between white and Hispanic households, as LMI Hispanic households were more than twice as likely as LMI white households to experience eviction or foreclosure (6.5% vs. 3.1%). The risks of missing a housing or utility payment were roughly the same between Hispanic and white households.

Housing distress was concentrated among low- and moderate-income (LMI) households of all races and ethnicities. However, disparities existed across the LMI racial and ethnic groups, (See the figure below.)

Statistical analyses of the Socio-Economic Impacts of COVID-19 Survey data show that LMI Black households were 1.4 times more likely than LMI white households to be delinquent on both housing payments (12.9% versus 9.2%) and utility bill payments (18.5% versus 13%) in the early months of the pandemic (from about late January to mid-May 2020). The relationship was somewhat different between white and Hispanic households, as LMI Hispanic households were more than twice as likely as LMI white households to experience eviction or foreclosure (6.5% vs. 3.1%). The risks of missing a housing or utility payment were roughly the same between Hispanic and white households.

Section 342 of the Dodd-Frank Act requires the St. Louis Fed to submit to Congress an annual report on its previous year's OMWI efforts. The St. Louis Fed's report, released March 31, 2021, is the 10th such report since the creation of its OMWI in January 2011. The report details the St. Louis Fed's 2020 OMWI activities related to employment, procurement and financial literacy. Read the 2020 report (PDF).

Past reports:

“How Daniel Got What He Wanted” is the fifth video in the Explore Economics animated series. It will help students understand that people have to save to get the things they want. Daniel wants a new bike helmet and must earn income and save to reach his goal.

Most of the research on the economic effects of COVID-19 has focused on financial and labor markets, and fiscal and monetary policy. Fernando Leibovici and Ana Maria Santacreu tackle the less-studied issue of international trade. They show that U.S. imports of medical equipment rose sharply, expanding the U.S. trade deficit and providing a new angle on the old issue of the resilience of self-reliance versus the efficiency of free trade.

St. Louis Fed President James Bullard discussed his expectations for economic growth and inflation in 2021. He also discussed various aspects of U.S. monetary policy during an appearance on Bloomberg Radio and TV.

Bullard said he expects 6.5% growth for the U.S. economy this year, which would be one of the fastest growth rates for the U.S. since the mid-1980s. He also expects more inflation in 2021 than in recent years and would like to see some of that flow through to inflation expectations so they become better centered at 2%, he said.

Bullard also said it is too early to talk about changing course on the Fed’s “very easy monetary policy” while the nation is still in the “pandemic tunnel.” It will be time to start assessing where to go next after the pandemic is more substantially behind us, he said.

Bullard also discussed financial stability, the increase in the 10-year Treasury yield to pre-pandemic levels, the potential for higher productivity growth...

By Lindsay Jones, Economic Editor

Turning 30 is a big milestone for anyone. It’s not quite as scary as turning 40, or as ponderous as turning 50, but the big 3-0 pretty much means you’re not a kid anymore. You’ve lived a little, you’ve seen a few things—and maybe it’s even time to take stock of where you’ve been.

So it goes for FRED, the signature economic database from the Federal Reserve Bank of St. Louis. Born on April 18, 1991, FRED is 30 years old. That’s right—FRED is a millennial, and all grown up!

FRED debuted with 30 data series—data whose changes over time are plotted on charts or reflected in spreadsheets. The data tool’s reach now spans the globe, with more than 788,000 data series and 6 million-plus users worldwide. ALFRED, which turns 15 in July, offers vintage, or unrevised, data in much the same way.